The post-dated cheques issued by the appellant by way of security were dishonoured on presentation and complaints were filed by the respondent in the court of the concerned magistrate in New Delhi against the appellant and its director.

Whether you received a postdated check or you’re thinking of writing one, it’s important to know how they work (and that they often illegal to write a check when you know you don’t have the funds to cover it, but things get a little fuzzy – and might depend on state law – when you postdate a check (assuming it is accepted as payment).

Of course, it’s also illegal to defraud somebody who sells you something (by Just because it's legal doesn't mean things will work out the way you intended: using a postdated check does not create a legally binding agreement between you and the person you wrote the check to.

The high court rejected the appellant's argument, holding that when the post-dated cheques were issued, the loan amount had been authorised and was an existing debt or liability and thus fell within the scope of Section 138 of the act.

Supreme Court decision In its decision, the Supreme Court considered whether a post-dated cheque to repay loan instalments and described as security in the loan agreement which is subsequently dishonoured is covered by Section 138 of the act.

There are a lot of things you can’t change in life, and the passage of time is just one of them.

But postdated checks seem to test the limits of our control.The Supreme Court held that whether a post-dated cheque is for "discharge of debt or liability" depends on the nature of the transaction.If, on the date on which the cheque is issued, liability or debt existed or the amount is legally recoverable, Section 138 of the act will be attracted.While deciding whether dishonoured cheques issued to discharge existing liability fall under Section 138 of the act, the Supreme Court further explained that the question of whether a post-dated cheque is for "discharge of debt or liability" depends on the nature of the transaction.Section 138 is attracted only if, on the date on which the cheque was issued, liability or debt existed or the amount had become legally recoverable.The incidence of post-dated cheques in Sri Lanka is quite high, according to Central Bank Deputy Governor Priyantha Fernando.